Project On-

“CSR activities of TESCO"

Business Ethics

COURSE INSTRUCTOR –Barrister Shaheen Ahmed

(Shd)

BUS 401 SECTION-8 Submission Date: 20th November, 2014

Group Members:

Rafey Zaman- 111 0825 030

Mostofa Ferdous- 111 0970030

Ashik Ahmed Razu- 111 0845030

Taslima-Tuz-Zohora- 111 0031 030

Rifat Ahmed Bin Zakir- 111 0819530

Monjur Hossain Mollah- 111 0871 030

Sabrina Humayan Upoma- 111 0574030

Md. Ferdous Khan Samuel- 1110706 030

Acknowledgement

This report would not be possible without the support of many people.We would like to thank

our Lecturer, Barrister Shaheen Ahmed who was abundantly helpful and offered invaluable

assistance. Our deepest gratitude to all the people for spending their valuable time and helping us

to accomplish this report . Also special thanks to my parents and my friends for their endless

support.

Letter of transmittal

November 20th, 2014

To,

Barrister Shaheen Ahmed

Lecturer, School Of Business

North South University

Bashundhara, Dhaka.

Subject: Submission of the Report of BUS 401

Dear Sir,

We are truly delighted to complete our BUS-401report. We have generated what we believe to

be the most appropriate. We tried our best to complete the assignment in this very short span of

time and with the quality of your expectation. We wish the assignment would be meeting your

expectations and standards.

We truly appreciate this task as it helped us to learn the corporate social responsibilty (CSR) of

TESCO.How it conducts it operations. We sincerely hope that you will appreciate our efforts.

We have enjoyed working on this assignment and have learnt a lot.

Sincerely yours,

Ashik Ahmed Razu Mostofa Ferdous

Monjur Hossain Mollah SabrinaHumayunUpoma

Rifat Ahmed Bin Zakir Taslima-Tuz-Zohora

Md. Ferdous Khan Samuel Rafey Zaman

Executive Summary

The purpose of this report is to analyze the Tesco, which is a global grocery and general

merchandise retailer situated in Cheshunt, UK. The organization is that largest organization of its

kind in the UK and has a market share of 30%.The company was founded by Jack Cohen, when

Cohen used to sell Surplus groceries from a stall in the Wall Street market. The name first

appeared in the 1924 with the name of tea merged with the initial two letters of Jack Cohen‟s last

name. The key findings of this report is the Corporate social responsibilty (CSR) of TESCO.

Table of Content

What do we understand by corporate social responsibilty (CSR)................1

Introduction………………………………………………………….........2

Strategies…………………………………………………………………2

Stakeholders…………………………………………………....................3-5

Supporting Local

Communities………………………………………………………………5-7

Five pillars of their corporate responsibility strategy……………............7-12

Conclusion.....................................................................................................12

Reference........................................................................................................13

What do we understand by corporate social responsibility (CSR)?

Though there is no universal definition of corporate social responsibility, it generally refers to

transparent business practices that are based on ethical values, compliance with legal

requirements, and respect for people, communities, and the environment. Thus, beyond

making profits, companies are responsible for the totality of their impact on people and the

planet. “People” constitute the company‟s stakeholders: its employees, customers, business

partners, investors, suppliers and vendors, the government, and the community. Increasingly,

stakeholders expect that companies should be more environmentally and socially responsible

in conducting their business. In the business community, CSR is alternatively referred to as

“corporate citizenship,” which essentially means that a company should be a “good neighbor”

within its host community

However, CSR can be described as the economic, legal, ethical, and discretionary

expectations that asociety has of an organisation .

Introduction

1

Tesco is a global retailer operating in 12 markets across Asia and Europe. We employ over

500,000 colleagues and work with suppliers in over 70 countries. In store and online we

enable over 85 million shopping trips each week.

In May 2013 we set out our new corporate responsibility strategy. We committed to using our

scale and capabilities as a global, multichannel retailer to create greater value for society.

This report sets out how we have started to tackle three urgent issues facing society – food

waste, health and youth unemployment. It also shows how we are strengthening our work in

the four essential areas

– trading responsibly, reducing our impact on the environment, being a great employer and

supporting local communities – which are fundamental to the way we do business.This year

has been about examining the issues in depth in order to develop clear and focused plans of

action.

Strategies

Our scale for good strategy

2

We introduced our third value – we use our scale for good – in recognition of the fact that we

can make a wider contribution to society by drawing on our operational skills and our scale.

This new value stands alongside two other corporate values: no one tries harder for customers

and we treat everyone how we like to be treated.

Carbon and food waste data assurance

Group carbon footprint: Our greenhouse gas (GHG) emissions in 2013/14 totaled 6.37

million tonnes of CO2e. This year the area of our stores and distribution centers increased by

1.74%, while our net carbon intensity decreased by 1%. We have continued to reduce the

carbon intensity of our stores and distribution centers, and the emissions per case of goods

delivered in our distribution network – surpassing our 2013/14 target. For more information

about how we calculate our carbon footprint, including reporting standards, a more detailed

definition of Scope 1, 2 and 3 emissions, and the current emission factors visit

Creating opportunities for young people

It remains a critical challenge. Youth unemployment is at crisis levels across Europe.

Developing future skills is a global concern. That‟s why we are determined to be part of the

solution and to create opportunities for millions of young people around the world.

Improving health is one of the world’s biggest challenges –

Improving health and growing – challenges. The World Health Organization estimates that

non-communicable diseases (NCDs) kill more than 36 million people each year. We want to

develop strategies which improve health for the long term.

3

Stakeholders

Customers

Our success as a business is built on working hard for our customers and making what

matters better, together.

We have a range of channels through which we engage with our customers. @Tesco was

ranked as the number one customer service Twitter account in 2013 for its responsiveness

and speed of response. Each year we run thousands of focus groups (called Customer

Question Time) and we have ongoing customer research trackers.

Colleagues

Our dedicated colleague viewpoint survey is an important tool that we use to listen and

respond to our colleagues‟ views, concerns and ideas and to make sure that Tesco is a great

place to work.

We have a dedicated Yammer network which helps our colleagues to stay connected. We

also have a scale for good website where colleagues can submit ideas on how we can become

a better business.

Our scales for good ambitions are shared across the business. To achieve our goals it is

essential that our colleagues are engaged. Many are already making a difference and are

leading on important initiatives. You can see a selection by watching our video

Investors

Our dedicated investor relations team meets with investors regularly. In February we ran an

investor and analyst day to share our business vision with the investment community. We

also have a colleague who is dedicated to working with the responsible investment

community.

Industry

4

We have sought specific feedback from experts and campaigners who lead the way on

reducing food waste, helping young people into work and tackling obesity.

On issues where industry collaboration is required, such as deforestation, we seek to engage

with partners and other retailers to bring about long-term positive change. We also continue

to work with wider industry bodies such as the British Retail Consortium.

Local communities

We have over 300 Community Champions working in our stores. They identify initiatives

and causes in the local community that we can support, for example charity events and career

fairs.We have also launched regional Twitter accounts in the UK so that people can stay up to

date with news in their area.

Suppliers

We have a global team of commercial, technical and ethical managers with local expertise

who work directly with suppliers to make sure we provide our customers with high quality

products that are responsibly produced. Our online communities, The Knowledge Hub and

Producer Network, now have over 1,000 and 2,000 members respectively. Suppliers can also

give us feedback through an anonymous partner viewpoint questionnaire.

Experts

This year we established an external advisory panel who are working directly with our Chief

Executive, Philip Clarke. The panel is a small international group of experts who can provide

an honest assessment of our performance and challenge us to do more.

At the inaugural meeting in February 2014 the panel discussed a range of issues including:

external trends that Tesco should be mindful of and can play a part in; how to engage

customers and how to embed scale for good in the culture of the business. Over the coming

months and years the panel will focus on different areas and issues and will be invaluable in

helping us to shape our strategy.

5

Other groups

We regularly respond to Government consultations on a wide range of topics and we have

given expert evidence to public working groups and inquiries. We also seek the expertise of

academics from many of the world‟s leading universities.

Supporting local communities

Charities

A key part of this is about supporting charities and good causes. Each year, we set a target for

donating at least 1% of pre-tax profit to charity. We meet this in a range of ways – from

direct donations to cause-related marketing. This year we contributed over £50 million,

equivalent to 2.3% of our pre-tax profits. Our colleagues and customers have risen over £10

million for Diabetes UK – our National Charity Partner. This includes our donations from the

sale of certain products, for example flower bouquets.

The money is funding the charity‟s biggest ever research program into a vaccine for Type 1

Diabetes as well as education and awareness campaigns. In total, customers and colleagues

across all our markets have raised over £22 million through Tesco facilitated events and

activities this year.

We also support communities through our products. For example, every year F&F offers a

range of Back to School uniforms as part of the „Buy One, Give One‟ program. When a

Tesco customer buys one product from the range, F&F donates an entire school uniform to a

child in the area in which the clothing is made. With the help of our customers, F&F has

donated more than 200,000 school uniforms to children in Kenya, Sri Lanka and Bangladesh

since 2009.

Partnerships

We bring together different partners to help tackle problems in communities. In Turkey we

have joined forces with the Turkish Education Volunteers Foundation and launched a three-

6

year program to provide over 100,000 children with personal development, healthy nutrition,

physical activity and sports training. In Scotland Tesco Bank has an established partnership

with The Reading Agency and each year runs a summer reading challenge to get thousands of

children across Scotland reading through their summer holidays. On the following page, we

show how our work with food poverty charities across Europe is helping to feed people in

need and how we responded to the devastating flooding in the UK and Malaysia by working

in partnership with colleagues, customers, suppliers and the emergency services.

Colleagues

In the UK we have over 300 centrally funded Community Champions. They work with their

local communities to coordinate our support for local initiatives and events.

Processes

It is essential that all our efforts to act as a good corporate citizen, locally and globally, are

underpinned by a strong framework of corporate governance. We work hard to meet every

relevant regulation at local and national levels and we apply the highest standards of

corporate governance to everything that we do. This is a vital part of our license to operate in

society.

Since we introduced our new value „we use our scale for good‟ our colleagues across the

business have been working to embed this value in everything that we do. From suppliers to

stores, from head office to customer service centers, we have committed to using our reach

and capabilities for the benefit of our customers, colleagues and wider society. This is far

more than a corporate responsibility strategy. It is fundamental for the long-term success of

our business.

Through our scale for good strategy we are working to tackle big challenges facing society.

We are well placed to make a positive difference, but we can‟t do it alone. We need to listen

to experts, build strong partnerships and consider the views of all groups who are influenced

by or are interested in our business.

7

Important pillars of their CSR

Tesco’s values are reflected in important pillars of their corporate responsibility strategy,

which is also called Community Promises and they are:

Buying and selling our products responsibly

Caring for the environment

Actively supporting local communities

1)Buying and Selling our Products Responsibly:

Buying and selling their products responsibly helps TESCO build trust among all their

stakeholders. Trust in the Tesco brand enables them to grow their existing business, as well

as diversify into new business areas such as personal finance and telecoms.

Strong relationships with their suppliers allow them to innovate to meet changing customer

needs and to attract new suppliers to work with them. As supply chains increasingly come

under strain from environmental change and population growth, they are working to make

them more sustainable.

a) Responsible Trading

Responsible trading in Tesco means ensuring everyone in their supply chain is treated

honestly and fairly, and that care is taken to minimize the impact their products have on

the environment. That includes how they:

Treat their suppliers and how their suppliers‟ employees are treated;

Work with communities where they source their products;

Establish and monitor animal welfare; and

Work to ensure that products come from sustainable sources wherever possible.

b) Relationships with Suppliers

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To make Trading Fairly in reality, they invest substantially in supporting suppliers to

deliver it. Their ethical trade managers in Bangladesh, China and South Africa help

suppliers and stakeholders address local and national challenges

Tesco believes in trading fairly, which is done by a new approach based on four key

principles:

Values – ensuring that they work with suppliers who share their values;

Monitoring – getting to the truth about conditions for workers in their supply chains;

Improvement – supporting their suppliers to improve; and

Transparency – being open and honest, working with others.

2) Caring for the Environment:

As one of the world‟s leading retailers, Tesco have a clear responsibility and a significant

opportunity to protect the environment. Their aim is to create more sustainable ways of doing

business. Theyare reducing their impact on the environment, including energy useand waste.

They are working with their suppliers to manage resourcesmore carefully in their supply

chains by reducing waterusage or tackling deforestation. They are empowering their

customerswho, together, can have a positive impact on the environment thatfar outweighs

their own, to create a mass movement in greenconsumption.

a) Climate Change

Climate change is one of the greatest threats mankind faces. It transcends national

boundaries, and threatens to affect us all in many different ways. Tesco considers that

retail businesses can play a powerful role in tackling climate change. They are determined

not only to play their part, but to play a leading role.

For Tesco, leadership on climate change means:

Setting a clear example through their challenging long-term targets, and making

genuine progress against them;

Working with other businesses to transform the consumer goods industry by tackling

carbon „hotspots‟ in the global supply chain;

9

Using their position as a trusted global brand to inspire their staff, customers and

neighbors to take action to protect the environment. With 492,714 employees and

millions of customers worldwide, they can have a positive influence on millions of

people every single day; and

Working with governments across the world to build an understanding of climate

change and the actions needed to tackle it.

Zero

b) Buildings

Low-carbon stores

Since 2005, they have been cutting the carbon footprint of Tesco stores across the

world. They have an ambitious program of carbon reduction in their new and existing

stores, designing in features such as increased natural daylight to their standard new

stores. In their existing estate, they are working to replace old equipment with new

technology to help their staff cut carbon.

Zero-carbon stores

Tesco opened the world‟s first zero-carbon supermarket in Ramsey, Cambridgeshire,

in the year 2009. This year, they opened their first overseas zero-carbon store in

Jaromer, Czech Republic, and completed two more zero-carbon stores in the UK, in

Welshpool and Bourne. These stores allowed them to test new technologies that they

can roll out to future new stores.

Renewable energy

Even the most energy-efficient buildings and distribution systems need to use some

energy. Generating Tesco‟s own renewable energy is therefore a key part of their

climate change strategy, and they are trialing several technologies, including

photovoltaic roof panels and cladding, solar hot water generation, CHP and ground

source heat pumps.

c) Transport

Saving fuel

Despite significant business growth, Tesco have not increased the size of their UK

distribution fleet for four years. They train their drivers to make driving more

efficient, by accelerating smoothly, using the highest possible gear, and maintaining a

constant speed. Tesco is now reducing the maximum speed of their UK vehicles to 50

mph. This is projected to reduce their fuel consumption by up to 3%.

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d) Supply Chain

Sharing knowledge

To share knowledge and expertise more widely across their supply chain, Tesco have

set up a Knowledge Hub, an electronic space to share best practice with their

suppliers on a daily basis to help them gain the confidence they need to invest in

carbon reduction. Tesco currently have over 150 members in their Knowledge Hub.

e) Waste and Recycling

Waste

Reducing waste is a priority for Tesco. Balancing the need to ensure staple products

are always available to customers against the need to minimize waste is a normal part

of store management. Each of their businesses has its own targets to reduce waste and

improve recycling, working within the limits of local infrastructure. Every Tesco store

in the UK has waste targets that are reported on a weekly basis.

Recycling

In China Tesco achieved their target for cardboard recycling, and their performance

for vegetable oil and fresh waste improved. Tesco also have plans to operate a

Recycling Service Unit in the Czech Republic and centralized waste recycling

through distribution centers in Slovakia. In Ireland they held Waste Electrical and

Electronic Equipment Collection Days at 28 stores, allowing customers to bring back

their old electrical appliances for recycling. Tesco recycled a total of 286 tons of

electrical waste, the equivalent of 19,000 televisions or 150,000 hairdryers. In 2010

they rolled out battery recycling points to all their UK stores. These have proved

popularity and their customers have recycled 228 tons of batteries that year. They also

installed innovative new information screens on their UK automated recycling

machines, which communicate how much CO2 is being saved by recycling.

3) Providing Customers with Healthy Choices:

11

Tesco want to help their staffs and customers to lead healthy lives. As a global business, they

know that „healthy lives‟ means different things in their different markets. Tesco aims to

work with their industry partners, academic and technical experts, and governments to

understand and help tackle key public health issues for example, food safety, obesity and

alcohol misuse.

Tesco believes if they have a reputation for selling safe food in a market where food safety is

an issue; it will help them build trust, giving them a significant competitive advantage and the

opportunity to work with governments to improve standards.

To them helping customers eat more healthily allows them to open up new business

opportunities, especially in markets where obesity is a major issue. Their „get active‟

programs around the world help their customers get fit, as well as increasing their loyalty.

Tesco follows this strategy through the following ways:

a) Healthy Options

Food safety

Basic food safety remains a primary concern for customers in some of their markets.

Tesco plays an important role in spreading best practice and improving standards.

Healthy eating brands

Their healthy eating brands contain nutritionally balanced products with controlled

amounts of fats, sugar and salt. Tesco offers them in seven markets. For example,

their Eat Well range in the US features reduced calories, fat, saturated fat and salt.

Changing the Formula

Tesco have been cutting levels of salt, sugar and saturated fat across their ranges since

2005, and since then they have reformulated over 3,600 UK products to improve their

nutritional content.

b) Better Information

Nutrition Labeling

12

All of Tesco‟s eligible own-brand food lines across the globe have nutrition labelling.

The only exceptions are food cooked in-store and products where it would be

impractical to add a label, such as herbs and spices. Their nutrition labelling uses

Guideline Daily Amounts (GDA) and tells customers how many calories and how

much sugar, fat, saturates and salt they will eat in one serving, along with the

percentage GDA for a typical adult.

c) Active Lifestyle

Tesco encourages people to lead more active lives by helping them manage not just

the energy they take in, but also the energy they expend. Last year they got more than

7 million staff and customers active, exceeding their targets in all their markets.

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Conclusion:

The socially responsible actions of such firms may be conducted due to personal business

interests and not necessarily driven by philanthropic motives; however, as long as they can

deliver a positive impact on society, they should be pursued. Hence, in this respect, we may

be said to be motivated by Consequentialist Business Ethics theory of Egoism which

essentially classifies any action to be ethical if the outcome is desirable. In reality, we believe

that it solely falls within the personal responsibility of a business entity to engage in activities

that promote social welfare alongside earning economic profit. Only then, we can hope to

have a vibrant community where the society is benefitted not only due to the business

efficiency of the firms but also due to the ethical business culture that they pursue in the form

of CSR. In that regard, firms such as Tesco are the epitome of business entities striking a

balance between their focus on economic purpose of existence and their responsibility to

contribute positively to the community.

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REFERENCE:

Tesco Plc (2011) TESCO: Corporate Social Responsibility. Online available at

<www.tesco.com> [Accessed Jan 2, 2011]

Graiser A. and Scott T. (2004) “Understanding the Dynamics of the Supermarket Sector”,

The Secured Lender. 60 (6), pp.10-14.

Joost W. (2005) “Supply Chain Integration in the Food Industry”, Executive Outlook.pp.20-

27.

Tesco Plc (2014) TESCO: Resources, Online available athttp://www.tescoplc.com/ [Accessed

Nov 18th, 2014]

Mintel Report (2004) “Food Retailing –UK”. Retail Intelligence.

Corporate Responsibily 14/15 half update (n.d.). Retrieved November 18th2014

fromhttp://www.tescoplc.com/index.asp?pageid=81#ref_society

Palmer M. (2004) “International retail restructuring and divestment: the experience of

Tesco”, Journal of Marketing Management. 20 (9/10), pp.1075-1101.